Job protection reform in India
Sean Dougherty, Veronica Frisancho, Kala Krishna 08 May 2014
Recent supreme court action has reintroduced labour reform into India’s public debate. This column estimates productivity effects of deregulation exploiting state-level variation in policy and plant-level data. Even modest deregulation has improved total factor productivity substantially; this sets the scene for a deep liberalising reform
India has some of the more restrictive labour laws in the world, but a large informal sector to which these do not apply. Therefore, firms thinking of growing in size and becoming formal must trade off the advantages of size with the disadvantages of facing regulations. This dilemma keeps Indian firms small and informal unless they have a lot to gain by growing, i.e. when they are very good indeed.
India, labour market reform
Avoiding middle-income growth traps
Pierre-Richard Agénor, Otaviano Canuto, Michael Jelenic 21 December 2012
Many of the emerging economies of the last two decades are now ensnared by ‘the middle-income trap’, in which middle-income countries don’t quite push through to high income status. This column presents recent research suggesting that, if governments act early and decisively to improve access to advanced infrastructure, enhance the protection of property rights, and reform labour markets, trapped economies – like their East Asian counterparts in the 1990s – can push on through.
In the postwar era, many countries have managed to quickly reach middle-income status, but few have gone on to become high-income economies1. Rather, after an initial period of rapid ascent, many countries have experienced a sharp slowdown in growth and productivity, falling into what has been called a ‘middle-income trap’:
Development International trade Labour markets Productivity and Innovation
income, innovation, labour market reform, investment, middle income
Ending the scourge of dual labour markets in Europe
Samuel Bentolila, Tito Boeri, Pierre Cahuc 12 July 2010
Many economists across Europe agree on the need for labour market reform. In this column economists from France, Italy, and Spain argue that while the reforms of the 1980s increased flexibility, they also led to a two-tier system with ultra-secure permanent workers and vulnerable temporary workers – increasing unemployment in the downturn. In order to complete the reform path, governments should fight dualism by making job security provisions increase smoothly as workers acquire tenure.
Never before has a crisis been so concentrated on youth in a large part due to labour market dualism – i.e. situations where there is a big difference between temporary- and permanent-contract workers. During this crisis there has not only been a hiring freeze but also mass layoffs of temporary-contract workers (typically held by younger workers).
As a result:
Europe's nations and regions Labour markets Welfare state and social Europe
labour market reform, Eurozone crisis, Dualism
France: The price of suspicion
Yann Algan, Pierre Cahuc 25 November 2007
France is in the throes of a vicious circle. Corporatism and state intervention undermine solidarity, destroy social dialogue and reinforce mutual distrust, thus feeding demands for more corporatism and state intervention. Here are some ideas on how to fix it.
France is in the throes of a vicious circle – one that has considerable economic and social costs. For over 20 years, surveys carried out in developed countries reveal that the French, more so than elsewhere, don’t trust their fellow citizens. They’re the most likely to mistrust public powers, social partners, and the justice system. They are also the most resistant to the market economy.
France, competition, mistrust, labour market reform, retirement policy